The real estate market is going through some interesting times this summer. We have low inventory, prices are holding at all time highs, and interest rates are up about 2% from the start of the year. When viewed with my 2021 goggles on, it looks like buyers have gone on vacation this summer. While some may just be on vacation and put their home search on hold, others may have stopped looking altogether. But the reality is, there is still a lot of house selling going on. In cycling or racing, you would call this a “false flat”; it seems like things have leveled off but the reality is, we are still going up. Here’s what the data is telling us: most houses are selling in less than a month, prices are have increased 12% in the second quarter – slightly off the pace of Q1, and more than half the houses are selling over the list price.
So while it may not be as “great” of a market as it was in the first quarter, it’s still a good market – for both buyers and sellers. For buyers, there is a lot less competition out looking for homes. If you are a buyer, this is a great opportunity to buy – fewer buyers means better contract terms – maybe even a contingent sale if you have a flexible seller. Sure, mortgage rates are higher than they were a year ago, but they are only slightly higher than 10 year average rate. It’s wise to consider an adjustable rate mortgage because there is a good chance rates will fall again once inflation is under control. This also means if you are looking for a huge windfall and drop in prices, it’s not likely coming. Why? Inventory is and will continue to be constrained. Take the chance to jump in while others are sitting on the sidelines.
If you are seller, you still don’t have that much competition on the market, and with limited inventory, prices are holding steady. While you might not see a crazy bidding war for your property, move-in ready homes are still seeing multiple offers and high prices. It may not be the market we saw in March and April, but it’s still a seller’s market. If this sounds familiar, the market looks a lot like it did in 2018 and 2019 – both markets we called seller’s markets, just not as exuberant as in 2020 and 2021.
Enjoy the warmth of summer!